Group – New Perspectives Frank Witter Member of the Board of Management Exane BNP Paribas and Barclays Conference, Geneva, 1 March 2016 Disclaimer

The following presentations contain forward-looking statements and information on the business development of the . These statements may be spoken or written and can be recognized by terms such as “expects”, “anticipates”, “intends”, “plans”, “believes”, “seeks”, “estimates”, “will” or words with similar meaning. These statements are based on assumptions relating to the development of the economies of individual countries, and in particular of the automotive industry, which we have made on the basis of the information available to us and which we consider to be realistic at the time of going to press. The estimates given involve a degree of risk, and the actual developments may differ from those forecast.

Consequently, any unexpected fall in demand or economic stagnation in our key sales markets, such as in Western (and especially ) or in the USA, Brazil or China, will have a corresponding impact on the development of our business. The same applies in the event of a significant shift in current exchange rates relative to the US dollar, sterling, yen, Brazilian real, Chinese renminbi and Czech koruna.

If any of these or other risks occur, or if the assumptions underlying any of these statements prove incorrect, the actual results may significantly differ from those expressed or implied by such statements.

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2 How the NOx issue will be solved

Europe (approved by KBA) USA

EA189 2.0 l (EU5): ~ 5.2m units EA189 2.0 l EA189 2.0 l EA288 2.0 l • Software fix only (Gen 1): (Gen 2): (Gen 3): • Working time ca 30 min. ~ 0.4m units ~ 0.1m units ~ 0.1m units • Fix started in Q1 2016

EA189 1.6 l (EU5): ~ 3m units • Soft- and Hardware fix required • Working time < 1h • Fix starts in Q3 2016

EA189 1.2 l (EU5): ~ 0.3m units Currently coordinating viable solution • Software fix only concepts and time lines with the responsible • Working time ca 30 min. authorities EPA and CARB • Fix starts in Q2 2016 3 Our 5 top priorities

Helping our customers In progress Communicating & providing effective technical solutions

Uncovering what happened Report based on Jones Day investigation Finding out the truth and learning from it second half of April

New structure In progress Launching a more entrepreneurial & decentralized Group structure

New mindset In progress Profoundly changing the way we do things

New destination Strategy 2025 Re-evaluating what we do & re-defining our targets (Mid-2016)

4 Publications of 2015 figures and AGM delayed due to remaining open questions and resulting valuation calculations relating to diesel issue

Event Previous Date Status Statement regarding result 2015

Annual press Delayed March 10, 2016 conference

Delayed Annual General Meeting April 21, 2016 “Before special items Volkswagen anticipates the Operating Result for the Group at the level of the Jones Day report on prior year” background and Sticking responsibilities Second half of April 2016 to timing connected to Diesel ✔ issue

5 Volkswagen Group reduces level of capex and resets priorities

Investments in property, plant and equipment Prioritization and focus on digitalization and e-mobility

Prior planning as of November 2014 New planning as of November 2015 Uncertainty requires Cancellation or delay of all €64.3 bn prioritization of projects that are not investments absolutely necessary

~€13 bn

max €12 bn Not jeopardizing our future: Focus on new products, spending on digitalization continuing rollout and and alternative drive train enhancement of toolkits, technologies will be completion of ongoing increased further capacity expansion 2015 - 2019 Ø per year 2016

6 Development World Car Market vs. Volkswagen Group Car Deliveries to Customers1) (Growth y-o-y in deliveries to customers, January to December 2015 vs. 2014) bf World: Market: 2.6% Volkswagen Group: -1.8%

Market VW Group Market VW Group Market VW Group Cars + LCV 9.0% 6,1% 4,3% 5,1% -7,7% -23.3%

North America Western Europe Central & Eastern Europe

Market VW Group Market VW Group Market VW Group

4.0% 2.5% 2,6%

-3,0% -21,2% -29,0%

South America Rest of World Asia Pacific

1) Figures excl. Volkswagen Commercial Vehicles, Scania and MAN. 7 Volkswagen Group – Deliveries to Customers by Brands (January to December 2015 vs. 2014)

‘000 units 1) January – December 2014 12.000 -2.0% January – December 2015 10.1379,931 10.000 Passenger Cars Commercial Vehicles

8.000 -4.8%

6.119 5.823 6.000

4.000 +3.6% +1.8% +2.4% -3.5% 1.7411.803 +18.6% 2.000 -14.7% -4.0% 1.0371.056 391 400 447 431 190 225 120 102 80 77

Volkswagen 2) Group

1) Incl. all brands of Volkswagen Group (Passenger Cars and Commercial Vehicles); -1.8% excl. Volkswagen Commercial Vehicles, Scania and MAN. 8 2) MAN incl. MAN Latin America Trucks and Busses GVW > 5t Volkswagen Group – Generating cash and robust financial position

Automotive Division - Net Liquidity Funding programs as of September 30 1)

(in € bn) (in € bn)

30 27,8 Money and Capital Markets Utilization 25 Commercial Papers 5.5 Medium Term Notes / Bonds 60.0 thereof: Hybrid Bonds 7.5 20 ABS2) 26.5 16,9 17,6 Borrowings 15 Committed Lines 2.2 Uncommitted Lines 7.7 Supranationals, development banks, government, other 16.0 10 Direct Banking Deposits 23.5 Total Amount 141.4 5 Bridge facility up to €20 bn

0 1) Excluding Porsche, MAN, Scania 2013 2014 Sept 30 2015 2) Including Porsche, MAN Source: Volkswagen Group

9 Volkswagen Group – Outlook for 2015

+ 4.2% ■ As commented in our Press Release on February 5th, 2016, the Operating Result 10,137 Deliveries to 9,731 for the Group before Special Items will be at the level of the prior year with an customers Operating Margin within the forecast range between 5.5% and 6.5%. (‘000 vehicles)

+ 2.8% In terms of Operating Profit… 202.5 197.0 ■ due to the impact relating to the Diesel issue we anticipate a Group Operating Sales revenue Profit after Special Items as well as for the Passenger Cars Business Area (€ billion) significantly below the prior year level.

6.3 Operating return 5.9 ■ For the Financial Services Division, we are forecasting an Operating Profit at the on sales prior-year level. (%)

2013 2014 Full Year 10 Passenger car market forecast 2016 – overall growth expected bf(in million units)

19,6 20,8 21,3 13,2 13,4 12,1 3,6 2,8 2.8

2014 2015 2016 2014 2015 2016 2014 2015 2016 75,6 77,4 79,2 North America 1) Western Europe Eastern Europe

2014 2015 2016

30,4 31,6 33,3 5,2 4,7 4,7 4,7 4,3 3,7 World

2014 2015 2016 2014 2015 2016 2014 2015 2016

South America 1) Asia-Pacific Rest of World Source: IHS Economics as of February 2016 1) Passenger cars and Light Commercial Vehicles 11 Volkswagen Group – all major brands grew deliveries in January (January 2016 vs. 2015)

‘000 units 1) January 2015 1.000 +3.7% January 2016 848 818 800 Passenger Cars Commercial Vehicles

+2.8% 600 507 521

400

+4.0% +5.2% +0.1% +2.1% 200 +24.2% 138 143 +21.4% +6.1% 87 92 31 31 28 28 16 20 6 7 5 5 0 Volkswagen 2) Group

1) Incl. all brands of Volkswagen Group (Passenger Cars and Commercial Vehicles); +3.6% excl. Volkswagen Commercial Vehicles, Scania and MAN. 12 2) MAN incl. MAN Latin America Trucks and Busses GVW > 5t Product firework1) aligns with expected future market trends

Body group trends until 20202) New models 2016 and to follow

Volume in 2015 3) until 2020 Sedan Sedan +9% Voyage A6L e-tron Panamera Phideon SUV +30% Magotan +15% SUV

Pick-Up +11% A+ SUV Ateca Q5 B-SUV Entry SUV MPV +4% Bentayga Tiguan Q2 Transporter +13% Hatchback Micro +14% Rapid (IND) up! Estate -6% A3 Leon Gol

City Van +20% Other +15% Coupe 911 Cayman A5 million 01020 Beetle Amarok Saveiro Boxster

1) Schematic overview – does not show all models 2) Source: IHS 3)final figures 13 Tightening environmental regulation and major trends driving R&D expenditures and Group strategy

… CO₂ and EU6 regulations … Market / consumer trends

Status and forecast of CO₂-regulations

270 EU US-LDV China (PC+LDT) Shorter Digitalization 250 lifecycles

230 US baseline: 219 210 China baseline: 185 SUV 190 E-mobility trend 170

per kilometer, normalized to NEDC per kilometer, normalized China 2015: 167 2 150

130 EU baseline: 142 US 2025:107

Grams CO Automated Shift in 110 driving priorities EU 2020: 95 90 2000 2005 2010 2015 2020 2025

Source: based on ICCT 14 Volkswagen is making digital transformation a top priority with focus on digitalization and autonomous driving Volkswagen Group Future Centers Autonomous driving

• 91% of accidents caused by human error  reduce number of bf accidents • People spend more than 4 years of their life in the car on average  make that time usable for the driver • Huge potential for trucks  significantly higher productivity • Car parked most of the day  customer achieves best return on investment by fully utilizing the car • Infrastructure limited  has to be used more efficiently 21st Century: 20th Century: is the Self-driving system is the core of the automobile core of the automobile Top fields of use • Three new Volkswagen Group Future Centers in Europe, California and Asia Individual Public Commercial Premium • Approach: designers and digitalization experts work hand in hand urban transport- vehicles cars to create the car of the future mobility ation • Goal: best in class customer experience, interface design and user friendliness, new interior concepts, integration of infotainment and Group is building on strong knowledge base – initiative entertainment systems started to get to market ahead of competitors 15 12 focus areas for a stronger Volkswagen Brand

NEW VOLKSWAGEN CORPORATE CULTURE POSITIONING EFFICIENCY STRATEGY HOUSE REGIONAL STEERING

• Volkswagen brand to • Board, management, staff • Checking brand positioning • Strong focus in order to • Successor of mach18 • Strengthen regional develop to a mobility to create modern corporate in major markets and adapt strengthen competitiveness strategy management and increase provider culture product range • e.g. large-scale launch of • Strategic planning responsibility • Electric, fully networked car • More responsibility, fast and fault free strengthened (staff and • Regions will be given scope as part of a complete creativity and open processes organization) to make decisions ecosystem exchange

MARKETS OF OPPORTUNITY COMMUNICATION STRUCTURES PROCESSES EXCELLENT LEADERSHIP COSTS

• Special teams take care of • Brand is establishing it’s • Corporate responsibility • Accelerate decision making • Revamp management style • Scrutinize all costs and better access in markets such own communication strengthened of management • New clearer mission standards as Asia, South America and • Important to strengthen • New structures created • Reduce committees and statement focused on • Thriftiness is imperative Africa trust of customers, bureaucracy, eradicate transparency, authenticity authorities and media duplicate tasks and openness

16 Volkswagen brand vehicle development: bundling of competencies into four model series and pooling of responsibilities

Competencies bundled into four model series Pooling responsibilities - entrepreneurial approach

Strategy division One person responsible for • Technology End of 1 Define lifecycles 2 Coordinate Concept • Quality life-cycle • Profitability • Deadlines Small Polo

Compact Golf Core of “new Volkswagen” initiative

• Clear structures and responsibilities • More time for workforce to focus on Mid-/Fullsize Passat core tasks • Strengthen personal responsibility, initiative and team spirit e-Mobility e-up! • Stronger focus on profitability • Acceleration of development

17 Volkswagen Brand: Substantial efficiency measures across all business areas

• Adapt lifecycle strategy to meet core regional competition Sales & Revenue • Focus on models providing sustainable Distribution profitability • Expand after-sales business Regional business models

• Reduce complexity and improve Fixed decision making process costs • Increase use of common parts and reduction of number of variants Production Cost • Sharpen target-oriented investment • Increase localization in core markets Procurement • Enhance R&D efficiency • Leverage scale effects and groupwide R&D synergy potential further

2014 2015

18 USA - Shorter life cycles, presence in growth segments and higher economies of scale

• Moving towards a 2 x 5 year life cycle • Extending the product range by offering more models in growth segments • New vehicle projects are steered locally by North American Planning & Engineering Center in Chattanooga, TE • Moving all major models onto MQB to realize economies of scale • Significant increase of local production, sourcing and cost reduction • Volkswagen Group Future Center in Silicon Valley currently being established: designers and digitalization experts work hand in hand to create the car of the future

New products from 2016 onwards Nafta Production in ‘000 units on MQB New Passat (USA)… Golf Alltrack B-SUV CC New Jetta (Mex) New Tiguan LWB (Mex) New B-SUV (USA) Tiguan T-Roc 1) Golf SportWagen (Mex) Golf 7 (Mex) 1) T-Roc is a concept car and could 100 be subject to change

2014 2015 2016 2017 … 19 Product innovation and cost reduction are the key pillars of Volkswagen’s strategy to cope with challenges in emerging markets

Intensified competitive environment Volume under pressure in difficult environment Export difficult due to high cost base & trade barriers Profitability

Introduce range of MQB vehicles incl. A0/SUVs Time 3 utilizing global sourcing and synergies in R&D and production

-14% -16% Refresh existing product portfolio and extend range of -36% Jan 2016: -39% 2 technologies 2012 2013 2014 2015 Volkswagen Group Deliveries to Customers Restructure business, streamline cost position and intensify export [Brazil, Passenger Cars and LCVs] 1

20 Deep roots and strong market position combined with further growth potential assures continued profitable growth in China

Deliveries to customers – strong January 2016 Strong operational & financial track record

(thousand units) 2014 2015 (in € bn)

2015 3,675 2016 3,549 5,2 Proportionate 4,3 4,5 Operating Profit 3,7 3,0 2,6 2,8 + 13.9% 1,9 2,0 881 898 933 845 906 835 955 969 1,2 Dividends paid to 400 0,8 0,8 351 0,40,3 0,4 Volkswagen AG

Q1 Q2 Q3 Q4 FY Jan 2008 2009 2010 2011 2012 2013 2014 2015 Localization of New Electric Vehicles Significant extension of SUV portfolio until 2020 Market Segmentation Locally produced SUVs 2014 2015 2015 mid-term > 15 models 24% 30% 76% 70% 4 >10 … local production 2013 import 2016 Other Bodystyles SUVs

21 Core challenges in commercial vehicle industry ...

Cyclical Strong correlation to GDP in developed world markets Not all regions hit by economic downturns at the same time

Further Local OEMs dominating in BRIC markets globalization Improving infrastructure, stronger regulations open opportunities for Volkswagen

Emission Europe with aggressive regulations, focus shifting to diesel lock-outs regulations BRIC trailing behind, but with ambitious roadmap

Connectivity & Platooning and partly-autonomous driving as transition solutions digitalization Data management for customers and traffic of broad interest

After sales and NewAfter customer sales increasingly solutions important & services as alternative gaining source importance of revenues new business • After sales increasingly important as alternative source of revenues New business models (e.g. enhanced telematics) can stabilize revenues opportunities • New business models (e.g. enhanced telematics) can stabilize revenues

22 ... require Volkswagen truck brands to cooperate closely

Cyclical Global market reach to ensure sufficient markets volume in local up- & downturns Close cooperation going forward Further Reduced fixed costs through globalization modularization and shared components

Emission regulations Combined R&D know-how for Connectivity & competitive product development digitalization Additional value through customer services After sales and new business opportunities

23 Volkswagen Financial Services1): A global, well diversified and successful business

Strong global presence Continuous portfolio expansion

in ‘000 contracts

4,549 4.727 Existing 3,796 Total markets 3,281 2,246 2,691 2,274 2.371 portfolio 1,964 2,148 1,808 1,983 1,623 12,817 Focus 1,505 1,508 1,524 4,946 5,560 5.719 markets 3,163 3,567 3,712 3,930 4,551 Start / market entry

Financing Leasing Insurance / Services Rising penetration rates Diversified funding structure

45,8% 44.3% 44.5% Equity, liabilities to Asset backed securitization 40.7% 15% w/o China affiliated companies, 34.9% 36.3% 30% 32.5% 32.9% other with China 30.6% 31,0% Bonds, 27.5% 28.9% 38% 26.4% 25.0% 24.7% 25.4% 17% Commercial Paper, liabilities to financial Customer deposits institutions

September 2015: €148.2 bn

1) All shown figures show Volkswagen Financial Services as of 30 June 2015, excluding financial service activities of Scania, Porsche AG and Porsche Holding Salzburg; MAN financial services activities are included from 1 January 2014 24 Strategy 2025 is being developed to prepare the Volkswagen Group for the new challenges of the automotive industry New focus areas Digitalization Sustainability Integrity/Compliance

• New function reporting to • 20 additional • New function in Board of Group CEO e-models by 2020 Management • Group-wide initiative • Focus on battery technology • Firmly anchored in • Digital Future Labs • Innovative conventional structures and processes • Industry / Business 4.0 drive trains Strategy

Foundation 2025 (to be presented mid-2016)

Strategy 2018 Future Tracks

25 Appendix

26 !

27 Volkswagen T-Cross Breeze

28 Audi e-tron quattro concept

29 Audi Q2

30 Porsche 718 Boxster

31 Porsche Mission E Concept

32 ŠKODA VisionS

33 Combi SportLine

34 SEAT Ateca

35 Bentley Mulsanne

36 Lamborghini Huracán Spyder LP 610-4

37 Bugatti Chiron

38 Volkswagen Group – New Perspectives Frank Witter Member of the Board of Management Exane BNP Paribas and Barclays Geneva Motor Show Conference, Geneva, 1 March 2016